I can't figure this problem out at all:
Ned plans to donate $50 per week to his church for the next 60 years. Assuming an annual interest rate of 5.2% compounded weekly, find the present value of this annuity to Ned's church.
The formula we are to use is as follows:
P = Fq [(q^T - 1) / (q - 1)]
with an installment loan of P dollars paid off in T payments of F dollars at a periodic interest rate of p (written in decimal form), and q = 1/(1+p).
My prof also let us know the following:
For all installment loan problems, assume that the payments are made at the end of the period, so that the current value of the first payment is worth P*q.
For #75 (this problem), assume there are 52 weeks/year.
50[1 - 1/(1 + .052/52)^(60*52)] / (.052/52) = 47788.69693....
He'll go to heaven for sure (Giggle)
Re: Installment loans
Always be cautious about individuals selling stuff door to door, as a number are rip-off artists. Aside from Girl Scouts attempting to get individuals hooked on diabolically addicting cookies, there are a number of door-to-door scams out there. Source for this article:Personal Finance